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N o v e m b e r 2 0 15
LIMITLESS LEAN Can you keep on improving your organisation forever, or is there a limit to the powers of lean?
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Organisations and interviews in this issue include representatives from: SPI Lasers, University of Lincoln, Revere AB, Industry Forum, Cardiff Business School, Columbia University. IN THIS ISSUE: Three Levels of Continuous Improvement: different ways to keep you moving and improving. Lean and Innovation: Can you be innovative and lean at the same time? Laser Lean: LMJ visits SPI lasers to witness their lean routine first hand.
EDITOR’S LETTER
Dear reader, Welcome to the November issue of the LMJ which is all about the limits of lean. The scope for lean is, no doubt, fully appreciated by anyone who reads this magazine. Whether it is manufacturing, where lean began or some of the other sectors that lean has branched out in to such as education, health, law and everything in between. The number of industries that it can be applied to seems to only be limited by the number of industries there are in the world, the depth it can be used in a business must have a limit, surely? There is only so much work place organisation, only so many kanban inventory control systems and only so many gemba walks you can do before you have covered every base. In this issue we will discuss whether there is an end goal, how to beat a lean plateau and answer some more questions about the limits of lean. Commissioning editor Fred Tongue
Stuart Morris from the University of Lincoln ponders whether continuous improvement can continue endlessly and whether or not it is completely necessary.
Managing editor Victoria Fitzgerald
We have a contribution from Richie Cooper who discusses if lean is the limiting factor or whether the limitations are from external factors.
Editorial director Callum Bentley
Sarah Lethbridge and Maneesh Kumar from the Cardiff Business School take a look at the need for innovation and how lean can help or hinder that need.
EDITORIAL
f.tongue@hennikgroup.com
v.fitzgeral@hennikgroup.com
c.bentley@hennikgroup.com
DESIGN
Art editor Martin Mitchell
m.mitchell@hennikgroup.com
Designers Alex Cole
design@hennikgroup.com In order to receive your copy of the Lean Management Journal kindly email lmj@hennikgroup.com or telephone 0207 401 6033. Neither the Lean Management Journal nor Hennik Group can accept responsibilty for omissions or errors. Terms and Conditions Please note that points of view expressed in articles by contributing writers and in advertisements included in this journal do not necessarily represent those of the publishers. Whilst every effort is made to ensure the accuracy of the information contained in the journal, no legal responsibility will be accepted by the publishers for loss arising from use of information published. All rights reserved. No part of this publication may be reproduced or stored in a retrieval system or transmitted in any form or by any means without prior written consent of the publishers.
We have several other articles as well as our usual news, events and online section. Joe Bell returns with a book review of a management classic and Bill Bellows has contributed with his monthly Out of the Blue column, this time all about schools of thought. Lean can do so much for a company, short, medium and long term. Benefits are well documented and the community involved, as I am sure you as a reader of the LMJ are well aware, are extremely passionate and forward thinking. Lean is constantly being re-evaluated, re-thought and re-jigged to be better. In our constant journeys it is easy to overlook or forget things that, in time, could become redundant. If your JIT production encounters a problem with supply or there is some kind of maintenance issue then you’re no longer lean. New inefficiencies can spring up across an organisation whether it’s due to an employee not being trained adequately, a recurring equipment failure or a decrease in waste at one point of production leading to a build of waste elsewhere these can all negate lean. So with all that said is there ever a limit to lean? Where everything in the organisation runs smoothly and adds value? Or is lean a merry-go-round of fixing issues that an organisation creates during the lifetime of it? I don’t want to claim that this issue answers such a philosophical question but I will go as far as to say that, thanks to our wonderful contributors, it will give you some interesting views and opinions on the limits of lean. I hope you enjoy this issue. Happy reading,
Fred Tongue, Commissioning Editor.
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C ONTE NTS NOV E M BE R 2015
C O N T E N T S
04 Introducing the editors 05 Lean News 08 Introduction to the issue by Nick Rich PRINCIPLES & PURPOSE 09 Can Continuous Improvement continue indefinitely?
Stuart Morris ponders the notion of how far we can take continuous improvement and how to keep going improving.
12 Can we be too lean?
Malcolm Jones discusses whether or not we can be too lean.
15 What are the limits of lean?
Richie Cooper discusses the limiting factors that can hamper lean progress.
18 If Innovation is the ‘Next Big Thing’, where does that leave Lean?
Sarah Lethbridge and Maneesh Kumar look at how to make innovation and lean get along.
21 Learning to lean
Mara Roberts discusses what an organisation needs in order to accept lean and incorporate it.
23 3 levels of Continuous Improvement
Joakim Hillberg identifies three ways to keep you organisation improving.
26 SECTOR FOCUS Construction Lifestyle Management
Ionel Grecescu, P.Eng. writes about how CLM is a necessary business management.
29 OUT OF THE BLUE
Bill Bellows is back with his monthly piece, this month about investment thinking.
30 LEAN TRAVELS SPI Lasers
Fred Tongue travels to exotic Southampton to see how a British laser manufacturer is benefitting from lean.
32 BOOK REVIEW
Joe Bell gives his thoughts on Covey’s 7 Habits
33 LEAN ONLINE 34 LEAN EVENTS 35 SUBS FORM
Elizabeth House, Block 2, Part 5th Floor, 39 York Road, London, SE1 7NQ T +44 (0)207 401 6033 F 0844 854 1010 www.hennikgroup.com. Lean management journal: ISSN 2040-493X. Copyright © Hennik Group 2015.
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INTRODUCING YOUR EDITORS Our experienced editorial board members contribute to the journal providing comment against articles and guiding the coverage of subject matter.
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JOHN BICHENO
TORBJØRN NETLAND
University of Buckingham, United Kingdom
Norwegian University of Science and Technology (NTNU), Norway
RENÉ AAGAARD
BRENTON HARDER
JOSEPH PARIS
Novo Nordisk, Denmark
Commonwealth Bank of Australia, Australia
Operational Excellence Society
JACOB AUSTAD
PAUL HARDIMAN
NICK RICH
LeanTeam, Denmark
Industry Forum, United Kingdom
Swansea University, United Kingdom
BILL BELLOWS
SARAH LETHBRIDGE
STEVE YORKSTONE
President, In2:InThinking Network
Cardiff Business School, United Kingdom
Edinburgh Napier University, United Kingdom
DAVID BEN-TOVIM
JEFFREY K. LIKER
Flinders Medical Centre, Australia
University of Michigan, USA
More information on our editorial board, their experience, and views on lean is available on the LMJ website: www.leanmj.com
LMJ SHINGO PRIZE FOR NEW BOOK ON LEAN Author and manufacturing improvement expert Gary Conner has been recognised with the Shingo Research and Professional Publication Award for his book, Lean Epiphanies: Catapult the Cow and Other Inspirational Continuous Improvement Stories published by SME. In Lean Epiphanies Gary Conner relates stories of his 20 years of experience conducting hundreds of continuous improvement initiatives. The book offers transformative insights and encouragement in short stories. Both students and experienced practitioners of lean manufacturing techniques can learn through Conner’s compelling insights into human nature, company culture, leadership, and the steps to business success amidst the everchanging dynamics of a new world economy. SME, a nationally recognised leader in learning and development, in the States, has published other Shingo Research and Professional Publication Award-winning titles, including a previous work by Gary Conner, Lean Manufacturing for the Small Shop. “SME is committed to advancing the manufacturing industry through sharing best practices and leading learning and development resources with members, enterprises, and practitioners,” said Jeannine Kunz, SME director of Tooling U-SME. “This book creatively documents and shares with readers an industry expert’s years of valuable experience. We’re proud to have published this work.”
NEW LEAN MEDICAL DEVICE FACILITY IN MEXICO Flex, a sketch-to-scale solutions company that designs and builds intelligent products for a connected world, celebrated the grand opening of its new medical device manufacturing facility and centre of excellence in October in Tijuana, Mexico, dedicated to the innovative development and manufacturing of medical devices. Located ten minutes from San Diego, California, the new Flex medical facility will serve as the showcase location for Flex medical operations, employing 2,400 workers and spanning over 530,000ft2. Devices produced at this facility for Flex’s OEM customers will help to diagnose and treat a wide variety of medical conditions, ranging from cardiovascular diseases and diabetes, to hearing impairment, neurological diseases, and skin ailments. The new facility will produce these products while employing lean manufacturing techniques. “Tijuana is an ideal location for our medical centre of excellence as it has a highly trained local workforce, strong local universities and a geographic location that makes it highly accessible and convenient for our customers,” said Javier Gonzales, Flex vice president of operations and general Manager in Tijuana. “Our operations provide a wide array of design through manufacturing capabilities and a management team that has guided countless customers through the stringent regulatory and compliance environment.”
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LMJ LEAN POWER FOR INDONESIA ABB, recently announced the inauguration of a new manufacturing facility for mediumvoltage air-insulated switchgear (AIS), located in Tangerang, 25 kilometers from Indonesia’s capital Jakarta. The move is part of ABB’s $20M investment plan for Indonesia, which includes last year’s opening of a new factory for low-voltage products in Cibitung, West Java. Switchgear produced by the new factory will facilitate efficient and reliable power distribution and help address the increasing demand for electricity, driven by rapid urbanisation and a growing industrial sector. In addition to serving the country’s needs, the unit will also serve as an important supply hub for the region. “This state-of-the-art facility will help us address the growing power distribution sector and underlines ABB’s commitment to Indonesia and South Asia” said Bernhard Jucker, President of ABB’s Power Products division. “The investment supports our global footprint approach and is in line with ABB’s Next Level Strategy aimed at accelerating sustainable value creation and focusing on growth markets.” The 3,700 square-meter plant will manufacture a range of medium-voltage AIS such as ABB’s UniSwitch, UniSec, UniGear and UniGear Digital, representing some of the latest innovations in medium-voltage switchgear. The new semi-automated factory has been designed for lean manufacturing operations with the capability to produce over 4,000 switchgear panels a year.
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LEAN MEATS FOOD PRODUCTION J&G Foods, Inc., a custom fresh meat provider, recently announced its collaboration with Manage Assist, in conjunction with a Massachusetts state funded grant, to deliver a comprehensive training program that is aimed at educating J&G’s employees with many of the core tools necessary for highly efficient food manufacturing. Many of the classes focus on “lean” principles, which involve an attack on waste in an organisation. Companies that embrace these philosophies can see immediate results, including increased profits and benefits to employees. There are a total of 17 courses, which include Principles of Lean Manufacturing, Identifying and Eliminating Waste, Effective Supervision, Teamwork for Results, Effective Management Practices, and Business Process Analysis and Improvement. “Manufacturing is competitive and consumers demand quality and value, so you have to excel every day. This starts with people and the more educated everyone is about best practices the better an organisation will be,” says Bill Leva, Chief Operations Officer at J&G Foods. Leva also states, “I am excited about the partnership with Manage Assist. Their knowledgeable and personable instructors interact with our associates very professionally and impart them with the education necessary in getting them to understand their role in making themselves and the company successful.” Val Rappaport, the Managing Director for Manage Assist, offers, “As a training provider we often face a resistance to change when teaching Lean Manufacturing classes. Not so at J&G Foods. J&G Foods is a performance-driven organisation that is continuously striving to improve their performance, to realise industry best practices. They encourage learning and the free flow of ideas. Classes are comprised of a mix of hourly and salaried employees working together to identify how they could utilise learned skills to achieve even higher levels of performance. Class exercises often develop into actual improvement initiatives as lessons learned are quickly implemented. It is most gratifying to see skills learned being put to use as soon as they are taught. We are proud to be a part of J&G Foods journey to continually improve their performance in all organisational areas.”
WELSH FIRM HIRES NEW LEAN SPECIALIST AND IS ON THE HUNT FOR MORE Building products firm Brick Fabrication Ltd has started a recruitment drive which will bring an additional 31 new jobs to its Pontypool facility over the next three years. The first new recruit is Sajith Soman, who joins the firm as a product design and development engineer. Mr Soman, 30, will be responsible for leading the continuous design and product development improvement activities across the business. He will implement lean manufacturing principles and innovative techniques throughout the production process, improving overall operational efficiency and performance. Having previously undertaken a Welsh Government funded two-year Knowledge Transfer Partnership between the engineering department of Cardiff University and Brick Fabrication, Mr Soman has already been heavily influential throughout the recent expansion at the Pontypool production facility. His experience and knowledge gained in achieving both a bachelors and masters degree in mechanical engineering were key throughout the production facility expansion. Mr Soman said: “I am delighted to join Brick Fabrication during such an exciting time in the company’s growth. I hope to add value to the business by establishing a culture of continuous improvement.”
STUDENTS GIVEN EXCLUSIVE TRAINING AND INSIGHT THANKS TO MANUFACTURING DAY Okuma America Corporation, a world-leader in CNC machine tool manufacturing, and Siemens, one of the world’s largest producers of energy- efficient, resource-saving technologies, partnered to host Manufacturing Day 2015 on Friday, October 2, 2015, in Charlotte, North Carolina at their respective facilities. Manufacturing Day is a nationwide celebration meant to inspire the next generation of manufacturers and dispel the myths associated with manufacturing. Okuma opened their doors and welcomed 150 students from six area schools in North and South Carolina, showing them what CNC manufacturing is all about and the various careers in the industry. The students and teachers discovered how manufacturing touches almost every aspect of their daily life - from the clothes they wear to the food they eat. Students visited multiple stations at Okuma, learning about innovative technology in the aerospace and automotive industries, robotics, engineering and the multitude of career path options. They experienced hands on interaction with robots and virtual reality technology and were able to see live cutting demonstrations on state-ofthe-art CNC machine tools including one station that produced customcut coasters for each student. “Manufacturing Day was a success at Okuma, not just in the number of students that attended the event, but in the overall enthusiasm that was generated by the students as they learned about the potential careers that exist for them in manufacturing. With a lack of skilled workers coming into the industry, events like Manufacturing Day allow Okuma to play a part in developing a skilled workforce while inspiring passion for the manufacturing industry,” said Brittany Russell, Okuma Training Program Manager.
If you have any news you think would interest and benefit the lean community please let us know. Send submissions to the commissioning editor Fred Tongue: f.tongue@hennikgroup.com
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INTRODUCTION WRITTEN
BY
MALCOLM
JONES
Are there limits to Lean? T
his issue attempts to answer an intriguing question. Our contributors address this from two directions, some asking if lean is an ideal which can be approached without limit and one where we should focus on eliminating the constraints, both physical and in our imaginations. For others the question is, is lean self – limiting, or even is the way we implement lean counterproductive? To some, lean is seen as inhibiting flexibility and innovation, and it may be true that the leaner the production system, the more tightly it is linked to the requirements of a particular customer – we are all familiar with plants organised as customer focused cells. On the other hand, I remember
Professor Fujimoto personally knew many of the figures who developed lean in the 1960’s. The view in his book is that lean is a Learning System, based on routinized operations, routinized problem solving and experimentation
visiting an electronics plant in Japan many years ago where every Friday afternoon the team discussed assembly layout improvement suggestions raised during the week and issued their request to the
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weekend engineering team to reconfigure the line ready for Monday morning, an example of continuous innovation in a lean environment. Another issue we address is the way in which lean and continuous improvement are promoted and implemented seemingly for their own sakes, rather than for a specific business or customer- focused purpose. Here, the focus on winning internal or external awards based on a lean system could be seen to take the focus away from why we are doing it. In discussing lean, agility, flexibility and innovation I worry that our discussions lose relevance and we are like medieval theologians debating how many angels can stand on the head of a pin, but there is a real issue here in terms of understanding what we mean by lean, which is not the lean and mean organisation of colloquial understanding. Perhaps we should return to the description of Toyota in my favourite book – The Evolution of a Manufacturing System at Toyota, by Professor Fujimoto. Professor Fujimoto personally knew many of the figures who developed lean in the 1960’s. The view in his book is that lean is a Learning System, based on routinized operations, routinized problem solving and experimentation. The limit to lean would then be the limit of our ability to learn. I hope this issue gives you food for thought and reflective learning.
PRINCIPLES & PURPOSE
Can Continuous Improvement continue indefinitely? Stuart Morris, continuous improvement facilitator at the University of Lincoln, poses the question can continuous improvement continue forever?
I
have often heard that “change is the only constant we have” and this shows that initiatives or projects are being chosen for the wrong reason. Often these changes are implemented with the best intentions but by those without the clearest concept of the work involved; this leads to resentment and resistance from the workforce who see this as just another “plaque grabbing” idea from management.
But why are we afraid of change? We are constantly changing in our everyday lives without thinking of it, from overtaking a car rather than staying behind it, a different tie with your shirt, a new cereal for breakfast but as soon as we walk into work our fear of change is activated. We need to lose the fear and accept that things must change. But there is a requirement on management, they must consult stakeholders
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CONTINUOUS IMPROVEMENT STUART MORRIS
in decisions and their expertise is utilised in the development of the way forward, management can be challenged during workshops on the need for change and how it is implemented and the buy-in for the change is developed from the bottom up.
FEAR OF LOSING CONTROL
Empowerment of the workforce is key to Continuous Improvement (CI) but this often worries management, why? Is this another case of the fear of change or a fear of being seen as weak by not dictating the way forward? Surely a team or department that is successful due to implementing CI reflects well on the management involved. The military, despite having the need for staff to follow orders, now embrace collaborative ways of working. CI Teams have been established on units to facilitate change, they lead workshops and train individuals in the skills required (5S, Kaizen, 8 Wastes, etc) and progressive senior ranks are seeing the benefit of using people with the experience and skills to influence the way the army meet the MoD’s needs.
and determine that the changes are genuine and needed for development rather than an industry award.
GENUINE NEED OR PLAQUE?
The UK military were initially guilty of the “plaque grabbing” technique with units chasing ISO9000 accreditation or Investing in People certification so that the Headquarters could display the plaque. This resulted in constant changes being inflicted upon the workforce with numerous changes being made before the previous set had been allowed to settle. This resulted in severe change fatigue across the ranks with staff unwilling to engage in new initiatives as they knew another would be around the corner. But finally a senior rank decided enough was enough. The military now implement the best from these schemes within their own documentation but with a military slant and gain more from them in the long run (they also don’t need to pay for the external audits to see if they can have the plaque). The workforce are now involved and the changes are allowed to settle as documentation is reviewed and, with the numerous cutbacks in finance and manpower, amended only when required. They do not have it totally resolved as there are requirements for certain accreditations in order to work with civilian agencies and contractors but change is no longer feared. The workforce are more involved
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Things won’t always go smoothly but don’t criticise your staff when they make un-intentional mistakes if they are trying to benefit the organisation
Things won’t always go smoothly but don’t criticise your staff when they make un-intentional mistakes if they are trying to benefit the organisation, the military call this the Just Culture, but Richard Branson has a great quote “You don’t learn to walk by following rules. You learn by doing, and by falling over.” Your staff, and the management, will make mistakes but they need to learn from them (that’s why it’s Continuous Improvement).
KNOWING WHAT TO CHANGE
So do you change everything or just keep attacking the current ways of working bit by bit? Junior officers (who rotated through posts every two years) were often encouraged to go into a new posting and make a change to “stamp their authority”. You would have senior ranks who have over 30 years of Service being told by someone straight out of training they could do it better but this is now totally reversed in the Royal Air Force. The officers are told to observe (GEMBA) the department for a period then, and only if required, make the observations that will improve the output or environment for the personnel. This is done through discussions with those undertaking the work and who are affected by the tasks.
PUBLICISING THE REASON
How often has something changed and we don’t know why? Management assume that because they have implemented the change everyone will be happy. We
PRINCIPLES & PURPOSE
need to have open discussions on the need for the change and how it will affect everyone involved. By implementing this staff will lose their fear, the rumour mill will be quashed and staff may come up with points management had not considered. Now working in CI as a civilian I see the same issues the military experienced a few years earlier; organisations are often approached to adopt a framework or see a competitor “win” an award with the publicity it attracts and see this as their goal. They should remember they are in business to produce a product or provide a service for the paying customer and any award is a fringe benefit. After all it’s about adding value, not ornaments for the office mantel piece.
We need to have open discussions on the need for the change and how it will affect everyone involved
Staff should be empowered to highlight the way forward for their department and the organisation because they are the ones that know the daily issues and how to react to them. But what if they don’t have this freedom to challenge the way things are done? You now have a workforce that turn up, do their work and walk away; things stay the way they are and improvements are reactive rather than pro-active. Your organisation ends up stumbling from one issue to the next, and whilst congratulating those who recover the situation, there is no investigation into the root cause. These are often the organisations that “don’t have time for CI” but need it the most. I have read articles about managers who frown upon those that do not “toe the line” and label them as disruptive rather than seeing them as those who can provide better ways of working. Training programmes are now including CI/lean as basic requirements for those aiming for management roles so maybe the tide is turning, slowly. But we still have a reactive approach to change. Why do we wait for a failure? That is too late as the damage to a product, the organisation’s reputation or worse case an individual has already been done. Organisations seem to wait for something to happen before they react and whilst being an advocate of “if it ain’t broke don’t fix it” CI will allow you to fine tune your processes to make them more efficient. Some organisations have suggestion boxes, improvement incentives or other schemes that reward improvement and whilst this is good for fostering the way forward why can’t society just want to do it?
DISPELLING THE FEAR
Kubler-Ross has highlighted the stages we need to overcome people’s fear towards change with her publication of the Kubler-Ross Change Curve to explain the grieving process. The shock, denial, frustration, depression, experimentation, decision and finally integration stages will always be present to some extent, it is up to all of us to limit the exposure to the earlier stages thereby increasing the willingness to experiment
and then integrate the new way of working sooner. This will all come from the open approach by management to the need for the change and a willingness to take on-board advice, those carrying out the process under review providing suggestions on the efficiencies that can be made and then the acceptance of the changes required despite any initial increase in workload.
HERE WE GO AGAIN
As stated earlier organisations often have change after change after change inflicted upon them and often in the same areas as before, why? Often changes are made and improvements gained but processes are not sustained. If we don’t monitor the changes that have been implemented then we will slip back into “the way it’s always been done”. Sustainment needs to be a collaborative process with management encouraging compliance and staff willing to adopt new ways of working whilst reporting back any issues and unforeseen benefits.
SO CAN CONTINUOUS IMPROVEMENT CONTINUE I N D E F I N I T E LY ? Yes, we do it unconsciously every day, now we need to embrace it in the workplace. As long as organisations involve stakeholders from the start, only implement change when the need is genuine, explain clearly why the change is needed and publicise what has happened staff will see change as a positive experience and the fear will be dispelled. This approach will help in sustaining the change and encourage future buy-in. If we need to re-address an issue then previous work and the feedback during the sustainment will help direct the next improvement.
So workforce feel free to comment on how you can work better and management listen to those who do the task and go out to see the issues first hand. As long as a change can be justified in investigating and is allowed to settle there is no reason we cannot revisit issues time and time again as situations change. Who knows if it is successful your organisation might be awarded a plaque to go on the wall!
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Can we be too lean? Malcolm Jones poses the question ‘Can we be too lean?’ and the ways we can be too lean.
W
hen asked ‘how lean can we go?’ my initial reaction was to think about ‘can we be too lean?’
The immediate answer is ‘yes’ and there is a Japanese word for it, ‘Muri’. Most of us are familiar with the word ‘Muda’, meaning ‘Waste’ and one description of lean would be the unending elimination of waste from the process. ‘Muri’ can be translated as ‘Overburden’ and I like to think of Muda as using excess resource to accomplish a task, whereas Muri is trying to accomplish a task with insufficient resource i.e. being too lean. Again, I think most of us would recognise this as not just a theoretical concept, but a way of life in many organisations. When people use the word lean I also have the concern that in common parlance ‘lean and mean’ tends to refer to organisations with too few people, whereas true lean organisations think of lean more specifically in terms of inventory. The archetypical lean organisation has excess people beyond the exact needs of the operations process, simply because we need improvement resources to improve our processes and eliminate Muda through Kaizen and process re-design. A typical team of 20 people might have operations work for 18 for example, the spare capacity being used for monitoring and improvement. Here we are using the second pillar of the Toyota Production System – Jidoka, separating people from equipment or process. To my mind then, the lean factory focuses on the elimination of waste, primarily transportation and inventory, through separating people from equipment and processes so that they can be managed
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and improved through a creative Kaizen process. The lean ideal is for material to flow seamlessly from raw material to finished product in the hands of the customer with minimum transportation. So, for example, a beverage can maker may build a factory next door to its customer and feed cans through a “hole in the wall” to the filling line of its beverage packing customer, or a car seat manufacturer might have an operation directly linked to the OEM’s final assembly line, delivering seats in line assembly sequence. The beverage company still has to deliver to the consumer through a complex supply chain, as does the vehicle manufacturer, but at least the first tier supplier process is about as lean as you can get. As we go down through the supplier tiers and up through the supply chain to the consumer there does seem to be a limit to this lean process. At this point it is worth introducing the other ‘M’, ‘Mura’. Mura means inconsistency, imbalance, unevenness, and relates to a situation where for some of the time there is excess resource (Muda) and at other times not enough resource (Muri). Mura is where the lean tools of Kanban and Heijunka come into play to translate uneven demand into an even production process. A basic Kanban system is fundamentally a rule based, inventory replenishment system, where parts are only processed when required to maintain the correct level of inventory in the system. In answer to our question of how lean can we go, we can use a standard Kanban calculation, based on Kanban batch size, run frequency, leadtime to produce and consumption. There are a variety of ways of calculating Kanban numbers,
A basic Kanban system is fundamentally a rule based, inventory replenishment system, where parts are only processed when required to maintain the correct level of inventory in the system
PRINCIPLES & PURPOSE
Lean aims to reduce this demand amplification by closely linking the supply chain, limiting batch sizes and synchronising material and information flows
some of which use the standard deviation of the order variability to generate a coefficient of variation and use that as a factor. The important points are to use a calculation as a basis for practical experimentation and to understand the relationship between inventory, leadtime and run frequency. The above process doesn’t look very lean – we have roughly 3 days inventory in the system at any one time. If consumption remains stable at 500 units per day, we can reduce inventory by increasing the run frequency from once every two days to once per day, or by reducing leadtime from 2 days to half a day, or indeed both. If this were practical, we would have( 500 x (1 + 0.5 +1))/250 = 1250/250 = 5 kanbans, roughly half the inventory on average. How lean can we go? In this example, if parts processing can match the assembly line and we deliver twice per day, we get to 4 kanbans, with about one day’s stock at any
Kanban rules in an award winning factory
time. To reduce further we would have to reduce the number of parts in each kanban container, if this were practical. If each container held just 125 parts, we would have more containers, but less inventory, because we could now deliver 4 times per day. This is where in reality we start to see trade-offs between Kanban batch sizes and logistics costs. In terms of automotive supply these have been addressed using a ‘milk run’ approach where small batches of parts from a number of suppliers are combined in one load, so that rather than four suppliers each delivering once a shift, the milk run picks up from all four suppliers four times per day, delivering two hours stock from each supplier direct to line. I have heard it said that we should continually strive to reduce the number of kanbans in a system until we experience shortages, and then solve the problem which caused the shortage, by reducing the leadtime on a particular component for example. This is applying the principle that lean is about eliminating waste and any inventory is waste so we should be continually striving to eliminate inventory, with a zero target. In this model we never reach zero, but it is a goal which can be pursued without limit. As an aspiration that is fine, but there are, as I have mentioned, trade-offs between inventory and logistics costs. Proponents of lean rightly point out that in mass
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CAN WE BE TOO LEAN? MALCOLM JONES
a particular product variant. The basic principle is that is we have three variants, A, B and C, with demand of 50% A, 25% B and 25% C then if we produce every part every month, we run two weeks of A followed by one week of B and one week of C. This has negative consequences for customer service and final goods inventories – if the customer wants a quantity of Cs they have to wait until week 4, unless the producer is stocking high levels of finished goods.
production the pursuit of low unit cost ignored the costs of inventory in terms of storage, transportation, obsolescence, cost of capital and the rest, but at the limits of lean we start to see other costs in terms of logistics. One strategy this does lead to is the localisation of production. Having first tier suppliers on your supplier park makes it far easier to manage the Kanban system and its logistics trade-offs. One further issue with complex supply chains is that they suffer from demand amplification. This is where the more nodes or information exchange points there are in a supply chain, the more demand is distorted so that a reasonably even final demand can become wildly uneven at the other end of the supply chain. For a complete technical description of how this process works in the manufacturing supply chain see John Sterman, Business Dynamics , McGraw Hill, 2000. Demand amplification
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Lean aims to reduce this demand amplification by closely linking the supply chain, limiting batch sizes and synchronising material and information flows. One lean tool which can be used for this is a Supply Chain Value Stream Map. This VSM can help us determine the inventory carrying costs and logistics costs of various options, so that we can optimise total product costs including the supply chain, rather than simply looking at internal manufacturing costs. The internal manufacturing strategy can use Heijunka to manage minor variations in demand and then use this levelled production schedule to analyse supply chain options with the aim of reducing total inventory and total cost. Heijunka works by reducing the EPE interval. EPE, Every Part Every X, is a measure of how frequently we produce
Every Part Every Week would mean that Cs are produced each Thursday afternoon/ Friday, reducing the need for large inventories to maintain customer service. Every Part Every Day would mean orders for C could be serviced every day from current production, depending on order quantities. In terms of limits to reducing the EPE interval, we usually define a pitch, which is the average order quantity from the customer. If we make every part at the pitch of customer orders, then finished goods stock can be reduced to a minimum (assuming fairly regular demand and the elimination of demand amplification in the upward supply chain). A combination of Heijunka scheduling and Kanban replenishment provides the technical answer to how lean you can go, combined with supply chain VSM analysis to determine logistics trade-offs and total product cost. Can we be too lean? Definitely in terms of people – we need to decouple people from processes to allow for process improvement. In terms of inventory and waste I believe there are practical limits where an ideal lean solution generates excess logistics costs which outweigh the benefits, but here too there is room for continuous improvement in reducing logistics costs in the supply chain to make the internal lean solution more viable. The ideal of one piece flow through the supply chain is just that, an ideal and we should not forget that the point of one piece flow is that any customer order quantity is divisible by one, so that if the customer orders in batches of 47 or 73 we can produce in batches of 47 or 73. How lean can we go? My answer would be to the level of average customer order quantity in a Heijunka/Kanban system, with all the provisos given above.
PRINCIPLES & PURPOSE
Is there a limit to lean? Richie Cooper looks at the factors that limit lean.
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ecently I was posed with the question “Is there a limit to lean?” My instant reaction was fundamentally lean itself cannot be limited as a concept but the key critical factors which are essential to sustaining, supporting and growing lean can be limited. The edifice of all improvement activities are based upon and grounded in a number of fundamental enablers. But by simply understanding this we can put in to place a proactive plan to support your personal lean journey with effective knowledge and competency growth. This then left me with the question “Is what you’re doing truly lean?” After all we have all seen companies cherry pick the parts they want and ignore other parts due to a lack of understanding or willingness to learn. The biggest of these factors limiting lean would be the organisations vision and desire to improve in line with competencies of the leadership of the organisation. If the leaders do not embody the vision of growth through lean methods then lean will always be limited
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IS THERE A LIMIT TO LEAN? RICHIE COOPER
to the expectations and abilities of the people in charge which can often be detrimental. For lean to self-sustain their must be total participative management, top down must meet bottom up through a clear consistent vision. Another key factor limiting lean would be market development and the understanding of the business markets we are involved in, how they work, how they add the value to the company and what it is your customer truly pays for. If the market changed drastically tomorrow due to a technological breakthrough or a change in the end customers’ expectations, wants or desires would you evolve with it or stick to what you know best? Market instability causes focusing on short term objectives, lean is by definition a long journey as there is no destination only the constant pursuit of perfection. Lack of education and training on the right subject to the right people at the right time can hinder growth and stagnate companies creating a monotonous status quo, which brings us back to the criticality of the vision and the capabilities of the people steering the ship. Whereas most companies will expand into new related markets, this can lead to high levels of investment, which can turn people off as most managers are risk adverse by nature. When I was posed with this very scenario I simply equated waste and losses against the potential benefits. So by simply creating a benefits to cost ratio “for every pound spend how many would be returned?” this approach helped the decision making team to see beyond the initial outlay and product development stage. Changing their mind-set from a “no we can’t” to a “yes we can, if…” So another key question this raised was how do we make decisions? And how do we know those decisions are the right decisions to be made? I have found a comprehensive cost deployment programme to be the best method as it turns all wastes in to losses and losses into project plans. So we are by the very nature of cost deployment attacking our biggest losses through the appropriate methods, whilst simultaneously developing our people into effective problem solvers. The will to grow is another essential for break out lean, whether it is market share, development of people or
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breaking into new markets a constantly evolving vision is required to be competitive and lead your market, this will inevitably come with an element of risk. A balance must be struck between finding new revenue streams and a comprehensive SMART cost reduction programme. Simply pursuing one can be detrimental culturally and will allow competitors to gain ground on your business. The abilities of the deployment team can be limited by their knowledge and effectiveness to deploy successfully in sometime harsh cultures driven by previous behaviours of management or even previous failures in leading improvements this is the most common of all the factors limiting lean and something we have all experienced. So are you using the right approach to lean for your business?, which minimises red tape, enables a problem solving culture and rewards the correct behaviours of your workers and management team. We can always do better and this is the basis of all kaizen. Cultural barriers and belief systems must be broken for lean to prosper, the shop floor worker must be able to share their vision with the managing director as well as the managing director being able to share their vision for the company on a practical and meaningful every day level. It is only our knowledge of lean and our customers which is truly limited. Often what we see is result focused lean but there are many intangibles which are essential to our long term lean success. When lean is limited, how is it different from the everyday status quo, for lean to be limited doesn’t this go against the very thing that lean is, whether it is your marriage, work or even the amount of money you spend you can always improve upon it. Not all improvements are financial but all improvements can be measured. Markets are always changing, new products are launched every year and customers always want it, faster, cheaper and free from defects. This question fundamentally challenges our knowledge of lean, if you think of lean as simply a toolkit, spreadsheets and graphs then lean is very limited. If you think of lean as an operating system for growth in your business then it is only limited by your commitment, desire and subject matter expertise. When we educate people we are said to give them new eyes, meaning they see more because they understand more. So is the market being limited by your businesses understanding of your products and capabilities of your people? Do we know what the customer really wants? Are there any risks to our market? And how can we manage them effectively. Commitment to lean is a false starter, for a company to be committed lean, they must firstly be committed to
PRINCIPLES & PURPOSE
their own people and the development of those people in line with the company’s vision whilst leading with humility. This must be supported by everyday behaviours and self-awareness of the criticality of their own positions and how their actions affect the work place. We have all seen managers deploying 5s yet their own offices look like an episode of secret hoarders. To request one standard of a worker and live a completely different one is hypocritical and is destined for failure. Often the face we see least is our own. This is known as hansei in Japan and is a major factor limiting lean in the west. Lean can apply to all aspects of every business sector and even beyond the private sector into the public sector and governmental run organisations which are often wasteful by nature. It is always easier when you are not paying the bills.
It is only our knowledge of lean and our customers which is truly limited.
One factor I recently learned about but, as with most lean revelations is fundamentally simple, is a company’s financial health. Now we all know most lean transformations come about when a company is fighting for survival, like Sun Tzu, the ancient Chinese military general said “put your men on death ground and they will not fear or flee they will be transformed.” Now unfortunately I met the other side of this coin where the product itself is so profitable that the actions, behaviours and systems surrounding the processes which create the product are enormously wasteful. This creates the false sense that everything we have done is the correct way of doing it despite the mounds of visual evidence compelling us otherwise, whether they be scrap products, breakdowns, downgrades or many other basic loses. But what is not seen is that with proper method, systems, visualisations and basics such as 5s and TPM we could easily increase the profitability by another 10% or more by simply educating our staff on waste and loss and attacking our biggest losses in a systematic way. But subconsciously the biggest blocker is: “Why should we change if we are highly profitable?” Of course no senior manager would ever say this publicly.
Most successful people have the ability to execute a complex strategy or execute when they’ve gathered enough data or found the root-cause but because they feel something in their gut. Most actions are driven by emotion. A general rule when creating your death ground scenario is to act before you think you are ready. This will create a sense of urgency you can use to drive the actions of others in the direction desired by the project leaders. This is when you will become more resourceful with your efforts and under pressure creativity will flourish if the right methods are chosen. It’s just like the soldiers on Sun Tzu’s battlefield, with nowhere to go and their backs against the mountains, suddenly they found strength and stamina they didn’t know existed and came out alive. In reality the company is being caught up in the market by competitors who are innovating their processes and future proofing their business. Within 70 miles of our facility there is a very similar manufacturer who creates 20 times the volume of a more complex product with a third as many people and no manual handling. This effectively reduces their costs engages their people in the right activities and standardises their production. This fundamentally tells me you can always improve; you can always do better from managing your supply chain effectively to your sales department, marketing team or even the cleaner. Often we don’t measure things we think are not critical, this is a fundamental mistake and creates a very reactionary culture. I would conclude from this that the only limit to lean is a limitation of our understanding, desire and ability to deploy lean alongside our discipline and rigor to follow up on what we did to educate people on why we did it and why we did it that way through that methodology. This is where know-how and know-why must be balanced. It creates an opportunity to get somebody who was not directly involved in the project to present it back to you. Adopting a standardised approach towards visualisation which ties in to your cost deployment programme is critical; we should always test the effectiveness of our visualisation, and ask the question can it explain itself without the need of somebody to present it. This will enable anybody to get involved, raise ideas and feel part of the team. Often for senior management this is the most painful part as there strategic view often misses process detail, but another perspective view on this would be it’s the most educational part of the process as the people closest to the work are having there say. So no, lean is not limited, people are limited by beliefs, abilities, human nature and often by their very own organisation.
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If Innovation is the ‘Next Big Thing’, where does that leave Lean?
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s a lean devotee, it is very easy for me to answer the question “How lean can we go” with “all the way …. naturally!” But as true lean thinkers, it is right that we should constantly review the relevance of lean and try to better understand how the methodology is evolving, recognising that, in the same way as lean has absorbed elements of other improvement methodologies, lean too will be superseded by a new operations management paradigm. It appears that innovation, whilst far from a new concept, is now the hotly sought after ‘ingredient’ that organisations are desperate to harness, adopt, nurture and grow. Yet many of us are all aware of the tension that lean can experience with innovation.
LEAN VS. INNOVATION - THE ARGUMENT ‘AGAINST’
In a previous article for the LMJ in 2012, Services and Standards: Stand Off or Stand Up? I discussed John Seddon’s severe criticism of that cornerstone of lean, standard work - how lean’s obsession with standardisation ‘locked in’ processes that didn’t work and that attempts at improvement within these standardised processes merely did the “wrong thing righter”. The article then reminded us that the point of developing a standard was to develop the ‘one best way that we know
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Sarah joined the Health and Services Team in the Lean Enterprise Research Centre in 2005. Since that time, she has worked on numerous lean projects in hospitals, universities and public and private services. Maneesh Kumar is a Senior Lecturer of Service Operations & Lean Six Sigma Trainer at Cardiff Business School. Before joining Cardiff, he was a Lecturer at Edinburgh Napier University. He is also visiting faculty at HeriotWatt University (Edinburgh) and Indian Institute of Management (Ranchi, India). In this article they discuss the perceived trade off between lean and innovation. now’ as a base, and then to use this base as a platform upon which to examine how to incrementally improve. That’s all very well in theory, but practical experience tells us that developing standard work is hard, and once achieved, the tendency to stick to that standard for too long, shying away from any kind of process improvement, can be too great. When coupled with the construction of an IT architecture around the process, change can be very difficult indeed. There have also been numerous articles such as how the introduction of more rigid methodologies such as Lean Six Sigma, suppresses innovation, even at companies that are known for their innovative culture. GE in particular, has been the subject of many reports that suggest that their devotion to the improvement methodology has limited their creativity. When GE’s James McNerney left to join 3M bringing the improvement methodology with him, discussion then turned to the company’s (who, lest we never forget, invented the post-it note) struggle between efficiency and innovative creativity. In a 2007 Bloomberg article of the same name, the author, Brian Hindo
PRINCIPLES & PURPOSE
discusses how innovation projects “took a back seat” once the methodology was introduced, that 5S “stifles creativity” and “The more you hardwire a company on total quality management, [the more] it is going to hurt breakthrough innovation,” a quote from Dartmouth’s Tuck School of Business, Professor Vijay Govindarajan. There is no doubt about it, practicing lean requires a ‘hardwired’ disciplined approach and whilst innovation requires determination, it is fair to say that to achieve radical innovation a certain amount of freedom is required. In Darius Mehri’s 2006 article “The Darker Side of Lean: An Insider’s Perspective on the Realities of the Toyota Production System” Mehri is very critical of affect that the discipline Toyota Way has on innovation claiming that in fact all of Toyota’s innovation is ‘outsourced’. So, if the freedom to think crazy, ‘out of the box’ ideas, to develop a spirit of experimentation and a desire to learn is necessary to foster innovation, where does that leave lean?
LEAN VS. INNOVATION - THE ARGUMENT ‘FOR’
There are many elements of lean thinking that actually are in keeping with an innovation approach, the most compelling being the inherent scientific nature of lean enquiry. Plan, Do, Check, Act is in itself, a constant pursuit of change and improvement. This is what Mike Rother refers to as ‘Kata’. The word ‘Kata’ implies practicing structured routines so that they form a habit, leaving the practitioner with a new ability. Mike Rother, in his work on improvement and coaching Kata clearly states that scientific thinking could be developed if we realise the difference between what we think will happen with what actually happens and then make an adjustment based on what we learnt from the difference. Many managers and employees in organisation fail to reflect on ‘what actually happened’ during the day due to their fire- fighting mode of operation. Lean organisations should assign time and space for employees to stop and reflect on their current work practices and then change them for the better.
Tidd and Bessant (2009) state that innovation is driven when organisations or employees have the ability to see connections, spot opportunities and take advantage of them. When we talk about seeing connections at a process level, standard work could be a good starting point for innovation. Toyota’s ‘wax after wax’ approach has not only helped employees to standardise processes but has also allowed them ‘to do what they do- but better’. The same approach was applied to their Keiretsu suppliers, resulting in innovation at a supply network level. Another positive ‘innovative’ element of a lean organisation is the desire to work cross-functionally. Dr Joe O’ Mahoney at the Cardiff Business School discusses the need to enable ‘liminal’ or ‘inbetween’ spaces across organisational, departmental, functional or cultural boundaries in order to harness an innovation culture. Enabling these spaces involves not only encouraging key individuals to span company boundaries by also collaborating with customers. Again, close working relationships with customers, a classic lean approach, should trigger innovation as together they solve problems and meet emerging demands.
They conducted research within 10 companies in order to investigate the impact of Lean Six Sigma on Product or Service Innovation. The majority of respondents stated that Lean Six Sigma fosters innovation, but that it mainly does so in an incremental way. They comment that the methodology “facilitates” innovation through the encouragement of problem solving but that it is not actively
There are many elements of lean thinking that actually are in keeping with an innovation approach, the most compelling being the inherent scientific nature of lean enquiry
Toyota’s Gemba based approach for problem solving is a classic example of learning by doing, where learning and continuous incremental problem-solving innovation (Arrow, 1962) happen at the same time. If we look into history, we may identify that the cumulative gains in efficiency through incremental process improvement is much greater over time compared to those from radical changes (Ettlie, 1999; Hollander, 1965, Enos, 1992).
SO WHO WINS?
Antony, Setijono and Kumar, in their paper “Lean Six Sigma – Exploratory Research in UK Organisations” discuss 6 different, fairly self explanatory types: Process Innovation, Product Innovation, Incremental Innovation, Innovation Capability, Radical Innovation and Problem Driven Innovation.
As ever, the answer is not as straightforward as lean vs. innovation, we HAVE to consider firstly the different types of innovation and appreciate different gradients of innovation activity.
involved within the development of new products, or within radical innovation leaps. Indeed, In the 2010 article “Lean Six Sigma, Creativity and Innovation” written by Hoerl and Gardner, both from GE Global research, New York, they agree that Lean Six Sigma is not a path to large scale ‘disruptive’ innovation but that continuous improvement within processes is essential in order to be successful. Following their research, Antony, Setijono and Kumar have visually expressed how Lean Six Sigma impacts the different types of innovation within the following diagram. Here Lean Six Sigma does not directly influence product innovation or radical innovation, but does directly contribute to incremental, process and process driven innovation. The team also recognise that although it does not directly affect product or
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INNOVATION SARAH LETHBRIDGE AND MANEESH KUMAR
So if lean thinking does not directly encourage large scale innovation now, will it ‘improve’ to better incorporate our understanding of innovation practices in the future? Will a new paradigm of operations management be mainly focused on innovation and merely accommodate some principles of lean? At the Lean Enterprise Research Centre, our approach has always been to challenge the fixation with one particular methodology, and encourage an appreciation of a range of methodologies. Within the MSC Lean Operations, John Bicheno was always looking at new ideas which could enhance our knowledge of ‘what is lean’. For example, teaching students the basics of the Russian innovation methodology TRIZ, which outlines many different innovation ‘formulae’, or paths, which companies can use to ‘predict’ the next step change in innovation. The knowledge of TRIZ innovation paths can be used to imagine a better, more ‘ideal’ future state.
Whilst a focus on the classic seven wastes has, for a long time now, been criticised within the lean community as ‘too simplistic’ a view of lean, but perhaps, like TRIZ, the wastes themselves can be seen as a pathway to innovation or predictors of innovation if you will. Consider UK vehicle licensing for example. In 1999, tax discs were issued only in Post Offices and local DVLA offices. In order to process all of the tax discs necessary in the month of August, huge queues would form as car dealers waited in DVLA offices processing the surge of new cars bought to take advantage of September’s new registration plate. The wastes here are: inventory - all of the forms needing to be processed; transportation – car dealers travelling to DVLA offices, motion – dealing with the forms within the office, waiting - in the offices, over-processing – multiple entry in forms and computers and as always, a whole lot of defects when dealing with a lengthy process. Skip forward a few years, and large dealers themselves were allowed to issue tax discs, another new registration month was introduced, reducing inventory and reducing transportation. Another few
Incremental Innovation
Lean Six Sigma and its influence on various types of innovation Adapted from Antony, Setijono and Kumar
FUTURE STATES AND SEVEN WASTES
Product Innovation
Lean Six Sigma s es n oc tio Pr ova n In
Radical Innovation
Innovation Capability
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Pr o In Dri blem no ve va n tio n
radical innovation, these sit within an organisation’s innovation capability and so both do have a role to play in terms of supporting an innovation culture.
years pass and individuals could order their tax discs online, skip forward to 2014 and the physical tax disc itself has become redundant, the ‘value’ for the Government lying in the computer database that recognises the license registration as being taxed or untaxed. Elimination of wastes towards a more ideal ‘perfect solution’ predicts an innovation pathway, what is perhaps more difficult, is actually creating the innovation to enable the leaps and that’s something that organisations can struggle with.
COPING WITH THE STRUGGLE
Dr Joe O’Mahoney from Cardiff Business School states “Most organisations are schizophrenic when it comes to innovation, they love the success of innovation … but on the other hand, they hate the risk, the unpredictable, intangible and ultimately uncontrollable nature of the creative process”. When organisations achieve the balance and become ‘ambidextrous’ - step change, radical innovation, coupled with effective, stable, standardised operations which incrementally improve, their success will know no bounds. Charles O’Reilly III (Stanford University) and Michael Tushman (Harvard University) in their 2004 Harvard Business Review article, “The Ambidextrous Organization”, acknowledge the “paradox of exploitive vs. explorative efforts” i.e. the dilemma of seeking efficiency and effectiveness within process whilst allowing freedom and creativity to explore new ideas. They suggest that clever companies separate disruptive innovation efforts from continuous improvement, enabling distinct processes, structures, and cultures to exist within the one organisation. However, it could be said that lean developments such as Eric Ries “Lean Startup” movement are successfully combining both the desire for ‘lean’ and ‘innovation’ within the one methodology. What’s certain is that if we really want to go as far as we can with lean, the need for innovation must be fully respected, supported and incorporated within our understanding of lean and within an organisation’s strategy.
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Learning to lean: adopting the right culture to undertake a transformation Mara Roberts has a decade of experience in higher education, first working as an international credentialer, and currently as Special Assistant to the Provost at Columbia College. Her work in Academic Affairs includes championing the LEAN initiative, leading major projects and new academic program implementations, workflow and organisational analysis and collaboration, and contributing to the Academic Affairs Office vision of becoming a model for effectiveness, efficiency, and innovation.
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ne of the keys to any successful lean program implementation is to make it fit in the current organisational culture. Change takes time and is incremental. To effect positive change over time, steps may need to be smaller than the original vision, and come in phases. And there will be disappointments. many times, a great idea fails because it did not take into account where the organisation was at that point in time. Instead, the idea sought to force quick cultural change on an organisation. The key to implementation is to integrate into the culture, and slowly make the idea part of the current culture. As a real life example: A small group wanted to implement the lean ideology at an organisation. The organisation itself is a very topheavy administration organisation; all major decisions are made at the top. This top-down management structure runs counter to what lean stands for. Nevertheless, the group wanted to
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LEARNING TO LEAN MARA ROBERTS
make this initiative work. So, the group started with what it had:
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Created a lean process that worked with the current structure. All lean process improvement projects had to be prioritised and approved by the upper management. Allow lean projects to fall within the current priority structure of the organisation. Meaning, lean projects will not have a “special status” over other projects. All action items that came out of the improvement projects also had to be approved by upper management (in the form of executive debriefs in which all action items were presented and approved individually).
This process phase continued for about a year. It made the lean process clunky, inefficient, and required a lot of wasted time in order to get the proper approvals and wait in department queues. The core group of lean individuals struggled with how un-lean the lean process was, but the group continued in this way because it saw the bigger picture of what it was trying to accomplish. After a year, something happened. Upper management asked, “Why are you wasting our time getting the approvals for all these action items? Just do them!” Trust had been established with upper management. After a year, leadership was able to see the lean process work, and great ideas and implementations came to life. The process is still not ideal. All lean projects still have to be prioritised and approved by the upper management. All lean projects still have to sit in the same queues as other organisational projects. But just as trust was established in one area, the core team continues to build trust in the project ideas themselves. Change is small, painful, occurs over time, and has to be worked toward. The above example identifies how integration into a culture determines the success of any program, idea or initiative. Change cannot be forced, it has to occur over time and be allowed.
There are a few key points to remember when integrating lean (or any new idea) into a culture. These are key to success:
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Know the culture you are working in. Understand the people, the structure, the why’s and the motivations behind the behaviors, policies, and practices. This tool is priceless in understanding how you can fit your program or idea in to that culture.
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Relationships matter. Network, network, network. How many times have you allowed yourself to buy something you really didn’t want or need, but bought it because of the incredible salesman that you really liked? Keep this in mind: you are selling a new idea, people won’t listen unless they first like you and trust you. Now is the perfect to time work on your people skills. You have to know how to communicate with people so as to not alienate them, and to build their enthusiasm in your program.
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Build trust. You have to be a person of integrity, values, and with the overarching needs of the organisation before yourself. Otherwise, colleagues will see through you, and will not believe in you or your ideas. Adapt. Very rarely will an idea start with the original intent. A program may start small as one process at a time. Remember, change occurs over time. Iterations will happen as an organisation believes in an initiative and sees ways to improve it – after trust is built.
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Do not be the “new guy” trying to “clean house”. You may have to be at an organisation for some time before you are able to build the trust and relationships necessary in order to bring forth new ideas. Be patient. Keep a watch for the “right time.” Sometimes, an idea is ahead of its time at an organisation. When profits are high, why would an organisation be worried about eliminating waste? But, if profits take a downturn, that may be time to propose a lean program. If employee satisfaction is low, customer dissatisfaction is high, there is a high rate of errors, etc. – these may all prove themselves as opportunities for an organization to remake itself.
Lean start-up is as difficult at any organisation as any other implementation. People have to be persuaded with the “what’s in it for me” message before they will buy in. So, find out what’s in it for your organisation to implement lean, find allies, and be ready to work very hard and very slowly to see your lean program come to fruition.
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PRINCIPLES & PURPOSE
Three levels of Continuous Improvement I
’ve yet to meet someone who disagrees with the equation 100 > 1, i.e. having 100 co-workers engaged in improving a company is much more powerful than just having a leader coming up with solutions and ideas. Most people also acknowledge that we’re not there, our heritage from scientific management where Taylor believed in transferring control to management and separating mental (planning work) and manual labour (executing work) still resides in our organisations. Also increasingly more we understand that it is in the value-stream where the work is done is where the big leverage is for improvements. Luckily nowadays most people see that we’re all just as capable to contribute to the organisation and it’s more a matter of changing the system and way of working. Often this starts with great enthusiasm on a team level, where daily meetings are started and whiteboards created with elaborate pick-charts for deciding which ideas to work on. Employees are engaged and feel that their ideas lead to actions. But after some time the momentum dies out, it can be a matter of weeks, months or years. But why? There are several reason it dies out and the main one is that there is no clear direction for the ideas which means that ideas can be quite random and can
even increase cost, lead to little actual improvement for the company and may even lead to negative consequences for the customer or other departments. It is easy for the ideas to just focus on the team’s own concerns or problems. So in the end there is less and less appreciation of what improvements actually take place and their benefits and slowly the daily work takes over. Of course in the beginning there are a lot of old issues that people have discussed that can be resolved. This creates a great atmosphere and empowerment but after most of the known issues are resolved finding relevant ideas becomes more difficult, it’s like staring at a blank sheet of paper and trying to be creative. In the end the amount of ideas slow down and eventually dies and all that remains are some whiteboard and kaizen sheet relics.
Sometimes organisations try to resurrect the momentum with actions like waste walks but my experience is that it only seems to prolong the inevitable failure. We also have several historical examples of how idea-driven continuous improvement has not been sustainable. Some examples are employee suggestion programs, selfmanaged worker teams and quality circles, all of which have been tried since the 70s and have not been sustained or have created a major impact on organisations. But don’t despair; there are just a couple of important pieces of the puzzle missing to reach next level within CI. An essential piece of the puzzle is to have a baseline of how things should be and
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THREE LEVELS OF CONTINUOUS IMPROVEMENT JOAKIM HILLBERG
An important question is; “What is the leader’s responsibility in the selfimprovement system?” The answer is as obvious as it is difficult - to establish the system puzzle. This does not mean that the leader does everything like deciding standards and metrics. Employees must be involved in setting up the puzzle, but the leader is responsible for ensuring it happens. Leaders must also create a channel for the escalation of problems that teams cannot solve, so they are dealt with at the proper management level. Few companies have this structure in place. The most important and often difficult part is for leaders to train people to solve problems. This is a major change from command-control and fire-fighting leadership, which solves issues and where leaders have been promoted for having and implementing solutions. Instead we want leaders that can train people to solve problems and let others take the credit for solving things.
what is important based on the organisations purpose. This baseline is created by:
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agreements on how the flow to the customer should be how work should be done
The ability to train problem solving is key, without it problem-solving will be superficial and the root-causes will not be eradicated. It is far too easy to just go from an issue to a quick solution.
how the workplace should be set-up what measures give us information on how we are performing having a joint plan of what needs to be done
Then there needs to be a pulse to check if we are on the baseline. This is where daily meetings come in. Here we check if we achieved what we wanted to achieve yesterday, what problems we encountered, what the plan is today and do we foresee any issues? Smaller issues and deviations are solved and tagged. The pulse can be checked more than once per day in high volume, multi-shift environments and in some rare cases only weekly but preferably it should de daily. Daily management ensures that things do not escalate out of control and are solved as quickly as possible. So there is less risk of the hockey-stick effect where things get stressed the closer we get to a deadline. Recurring issues need to be escalated to an improvement meeting. An effective improvement meeting is often short and focuses on having a pulse in resolving new issues and that there is a momentum in root-cause analysis. Visualisation is key for all areas. The best plans and standards are built into the work, daily meetings have a visual team board and improvement work uses a similar board with the main difference being that issues come from deviations and a pick-chart is often redundant as recurring issues should be resolved.
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Sometimes organisations try to resurrect the momentums with actions like waste walks but my experience is that it only seems to prolong the inevitable failure
Organisations that have been working with deviation improvement for a while often start realising the incredible power in frontline driven continuous improvement. But some issues do arise after a while. Firstly only working with deviation is not enough in the end to really improve the business. Also working only with deviations and root-cause eradication becomes negative and mechanical after a while. One becomes tired of deviations. Just imagine if we only focused on deviations in our home life with our children or spouses, it would not be very sustainable. In business we’re often more resilient but in the end this negative view is detrimental and does not give energy or motivation. So then what is the next level of continuous improvement? Passion and creativity is needed, we need challenges that push us out of our comfort zone and let us be creative and achieve flow. This level is challenge-driven continuous improvement. The aim is to connect continuous improvement to the real challenges of the business.
PRINCIPLES & PURPOSE
The first step here is the process of policy deployment; with it you connect the front-line with the key challenges of the business. Through catch-ball, managers gain consensus on direction and targets and challenges are deployed. Catch-ball is a repetitive process that starts from the top where the key is to select the vital few strategic directions for the organisation, the deployment process is usually a yearly process. The next step is how to reach the challenges. This is not problem-solving, the difference here with root-cause eradication is that we do not know the actual situation nor how we got here. We are trying to get somewhere but we don’t know where we’re going, so what is the thinking model here? Another fatal mistake here is to create detailed longterm action plan, how can we create a plan to reach a goal if we do not how to get there. Long term action plans are just a form of false organisational security. A much better approach is Toyota Kata. It consists of two parts. The first is the actual routine for reaching challenges. This is the improvement kata, in essence it is the scientific method or a form of PDCA. Through small PDCAs in the form of experiments there is learning and the challenge is eventually reached. If it’s a real challenge it will not be possible to solve at once, so the challenge has to be broken down into a deliverable, target condition. Then iterative experiments will take you to the challenge but not in always in a straight line. The other essential part is having the leadership to coach people to work towards the challenge. A command and control leadership here would lead to no experiments, no learning and no-one developing the competence to work towards challenges. It is easy to get lost without coaching. Also leadership does not have this coaching capability, in research of leadership most leaders just tell instead of coaching and giving feedback. The coaching kata is a routine for leaders to pose questions in order to support people in their attempt to meet and solve challenges. The purpose is to let the people who experiment reflect and learn under a coach’s guidance, this
slowly builds up a great competence in continuous improvement. Toyota Kata is one approach here in iterative experiments but there are others with similar thinking like lean startup and agile. It is no wonder we see different approaches here. The classic deviation focused approach of lean is not sustainable in the longterm. The real business challenges are not addressed and it becomes too negative in the end. A challenge driven approach to continuous improvement puts people outside their comfort zone. When they start to experiment, learn and reach challenges there is a huge growth in both their competence and work satisfaction. When this spreads an organisation creates a culture of continuous improvement. The model described should not be seen as a transformational model. You do not, for example need to start with idea-driven. The three levels of CI are also not contradictory. You need good ideas, you also need measures, plans, visual control, pulse meetings, daily huddles etc when working with challenge driven improvement. A starting point can also be challenge driven improvement in order to drive the creating of a functional operational management and deviation driven continuous improvement. In the end you should see the rate of continuous improvement rise from
the usual average of 1 implemented improvements per employee per year to multiples of 10 or sometimes 100. Just imagine the power if most of those improvements are connected to the challenges of the organisation! And the best part is the win-win, employees who feel a sense of ownership and can affect their work are those that are most satisfied!
Joakim Hillberg is an acknowledged lean expert, whose focus is building lean capabilities through integration of training and coaching. In more than 23 years Joakim has been involved in lean transformations in over 15 countries in a multitude of sectors from process industry to healthcare and media. He has trained with lean experts from Japan including Toyota. He has written numerous articles, cowritten books, developed games and trained thousands of people. Two clients he has supported has won the Swedish Lean Forum prize. He has an MSc from Chalmers and an MBA from INSEAD.
www.leanmj.com | November 2015
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SECTOR FOCUS
CONSTRUCTION
Construction lifecycle management a necessary business strategy Ionel Grecescu, P.Eng. looks at how construction lifecycle management (CLM) promotes new ways of doing business and achieve lean by delivering construction process Integration (CPI) framework to manage all the phases of the lifecycle of a capital asset: design, build, operate and retirement. READ ABOUT: Simplifying the alphabet soup of BIM, CLM, CES, ERP, etc. What construction can take from manufacturing and lean’s long relationship The best way for construction industry to evolve
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M
anufacturing and construction are unique fields on their own but share a great deal of things together. Both are, obviously, concerned with creation. By de facto terminology convention, manufacturing is concerned with creation of products and construction with creation of capital assets. There is also a clear symbiotic relationship between the two, and one immediate conclusion is capital assets have a multitude of various products in their composition.
What is so different about Parametricism in comparison to modernism and in comparison to all prior approaches to architecture?� It is the truly radical transformation of the spatial and formal repertoire brought about through computational processes The Impact of Parametricism on Architecture and Society. Patrik Schumacher
Both fields have been transformed by the paradigm shift that took place in the second half of the 20th century and caused by the introduction of computer assisted parametric modelling which has changed our view of the world by enabling the transition from Euclidean geometric solids and making way, in the 21st century, to a new epochal style called Parametricism. The parametric design paradigm has pervaded all aspects of society and proved to be a transformational force, invisible, yet ubiquitous, lost in the details of the immediate surroundings.
WHAT IS BUILDING INFORMATION MODELLING?
Building information modelling (BIM) is a technology and approach for designing and engineering of facilities in construction using the digital mockup paradigm. BIM has been shaping the landscape in the last decade and is becoming a de facto standard in the architecture, engineering and construction (AEC) industry. One interesting feature, to be noticed, is the creative use of additional disciplinary
SECTOR FOCUS
We pursue the parametric design paradigm all the way, penetrating into all corners of the discipline. Systematic, adaptive variation, continuous differentiation (rather than mere variety), and dynamic, parametric figuration concerns all design tasks from urbanism to the level of tectonic detail, interior furnishings and the world of products Parametricism as Style – Parametricist Manifesto. Patrik Schumacher, 11th Architecture Biennale
dimensions used in the AEC/EPC ecosystem: 4D modelling is used to virtually simulate the sequence planning of the build phase and for ideal space utilisation on a construction site. 5D modelling adds to the 4D dimensions of the model, the costing estimation of the build phase on a construction site. 6D modelling adds to the 5D dimensions, facility management capabilities for the operate phase of the construction lifecycle to enable model driven operations and maintenance.
BIM is a digital representation of physical and functional characteristics of a facility. A building information model is a shared knowledge resource for information about a facility forming a reliable basis for decisions during its lifecycle; defined as existing from earliest conception to demolition The National BIM Project Committee
Those multi-dimensional processes are driven by the digital mock-up information in the BIM which manages the associativity properties of all its incorporated items in such a way any change in design reflects automatically into the higher dimensions.
AEC/EPC IS A UNIQUE ECOSYSTEM Construction has evolved in a unique fashion and over time it gave birth to a unique ecosystem with its own terminology and concepts. Architecture, engineering and construction represents a critical construction domain which has a main goal to design capital assets. Engineering, procurement and construction also represents a critical construction domain which main’s goal is the build of capital assets. Together, those two construction domains form a dichotomy, and to complete the ecosystem, two more players must be added: Owners contract AEC stakeholders to design capital assets, and EPC stakeholders to build it. Operators are contracted by owners to operate capital assets on their behalf. Immediately we conclude the purpose of the AEC/EPC ecosystem is to design, build and operate capital assets.
What keeps the AEC/EPC ecosystem whole is the contract and the specific relationships between the owners on one side of the contract, and the stakeholders on the other. Those relationships are not any different from those between the original equipment manufacturer (OEM) and its multi-tiered suppliers in the automotive and aerospace industries.
WHAT IS CONSTRUCTION LIFECYCLE MANAGEMENT?
Construction has been influenced by the product lifecycle management (PLM) business strategy that contributed to achieve lean in manufacturing. Both fields have a close relationship and it is sufficient to observe the construction lifecycle to conclude, for instance, the design and engineering phases are sharing the same processes, methods and tools used in virtual product development in manufacturing. CLM might have an almost identical definition to PLM: A strategic business approach applying a set of business solutions in support of the collaborative creation, management, dissemination, and use of construction definition information across the extended enterprise from concept to end of life - integrating people, processes, and information. CLM is a broad business strategy that bridges the gap between design, engineering, construction, procurement and back-office business enterprise systems such as financial and HR. Its strategy aims to cover missing support areas and to overcome the lack of integration and collaboration between different business tasks by facilitating the sharing of construction information across all company functions, customers and suppliers. By analysing the construction lifecycle timeline above, which shows the build phase of a capital asset, one immediate conclusion that jumps out is the proliferation of disciplinary silos that are used by various stakeholders during tendering, construction and commission
www.leanmj.com | November 2015
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SECTOR FOCUS CONSTRUCTION
CPI framework’s mission is to promote innovation and collaboration between construction disciplines, processes and streamline business practices that result in increased profitability and savings. The vision is of a fully CPI applicative environment that helps break organisational and information silos, enabling streamlined construction lifecycle processes that not only include design and engineering processes but also construction, operations and maintenance through retirement. which corresponds to the build phase: Contract management Tender management Project management Change Management Bill of quantities management (quantity surveying) Document management Material management Estimating Subcontracting Purchasing Scheduling Forecasting Controlling (document control, cost control, project control) Commission management (handover) This build phase and its related processes are entirely driven by the digital mock-up information in the BIM. Any change in the build phase should be routed bidirectionally automatically into the design and its associated BIM master. The build phase in the construction lifecycle presents significant challenges because of its multi-disciplinary nature
and the proliferation of associated data silos that have exploded into construction in the last decades. Construction related data is locked inside those silos and stifles efficient collaboration during project delivery. Construction must improve its processes, methods and tools by taking a lean approach to improve collaboration and execution during design, build and operate phases of the lifecycle. CPI is the goal of the broad CLM business strategy.
CONSTRUCTION PROCESS INTEGRATION DELIVERS LEAN
CPI is a framework consisting of horizontal end-to-end enterprise wide business processes focusing on construction lifecycle delivered through an ecosystem of seamlessly integrated enterprise applications that bridge the gap (business process and data flow) between design, engineering, construction, procurement and backoffice business enterprise systems.
The ability to exchange data among project team members is critical to collaboration, as is the ability to analyse data to improve a firm’s performance Better tools are needed that allow more intensive data sharing within and beyond individual firms, especially with owners and fabricators Lean Construction: Leveraging Collaboration and Advanced Practices to Increase Project Efficiency SmartMarket report. McGraw Hill Construction
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FINAL WORD
I believe construction is ripe to receive a bill of material to manage the build phase of the construction lifecycle, in the same fashion, engineering and manufacturing received one. Imagine for a moment how much could be achieved if a construction bill of material would be managed from its own repository, and by allowing all the various disciplines and processes to access it during the critical build phase of the construction lifecycle. Such a repository would be similar in function to a manufacturing execution system currently used in Manufacturing to manage the build phase of the product lifecycle. Why not name this repository, construction execution management? Such a system would manage all the interactions between the various stakeholders during the build phase of the construction lifecycle and because of its nature it would provide automatically out of the box all the collaboration requirements of a globally integrated enterprise to “design anywhere, build anywhere and operate anywhere”. And who will provide construction with its own bill of material? Frankly, it doesn’t matter, under market pressure, it will be either, an ERP or a PLM vendor, or probably more likely, it will be everybody, as it happened in manufacturing. Such a vision would allow construction to achieve the ideal of lean that benefited so much manufacturing. In the end, CLM is nothing more than PLM for construction.
OUT OF THE BLUE BILL BELLOWS
OUT OF THE BLUE
Out of the blue: On Passing Through M
y wife and I celebrated our 32nd wedding anniversary earlier this year. Every day, we add 24 hours. Every week, another 7 days. To quote Mick Jagger and Keith Richards, “Time waits for no one, and he won’t wait for me.” On a daily basis, social networking websites remind us of the birthday and wedding anniversaries of friends and family members. My mother-in-law recently celebrated her 87th birthday and soon, my father-in-law will celebrate his 88th. Time goes on, continuously! Yet, to ask someone their age is to ask time to stop, if only momentarily. Legally, we think in terms of aging in increments of years, remaining at a given age for 365 days. Birthday parties remind us when to shift to our next age, in step-like fashion. Somewhere along the line, we discover fractions and half ages appear in a child’s answers to “How old are you?” But, if time waits for no one, these apparent steps disappear, and we enter the realm of “passing through,” realising the difference between thinking of aging continuously and thinking of aging incrementally. In 1999, Russell Ackoff shared his thoughts on aging, as well as having fun when “denying the obvious and exploring the consequences,” in his classic article, On Passing Through 80. Russ lived another 10 years, determined every day to find “the obvious to be wrong.” I had the good fortune of being mentored by him for the last 7 years of his life. “The obvious,” he asserted, “is not what needs no proof, but what people do not want to prove.” He admitted he was heavily influenced by Ambrose Bierce’s definition of self-evident: “Evident to one’s self and to nobody else.” As introduced in several of my earlier Lean Management Journal articles, including “A Brief History of Quality” (March/April/May
2015), I propose that our thinking includes the constant use of two fundamental modes. One involves the use of categories, such as having two modes of thinking. When confronted with new information, we place it into a pre-existing place in our brain, much the same as placing it into a file folder on a computer or in our desk drawer. Asking “What is this?” is a search for a pre-existing category, perhaps the classification of a rock discovered on a recent hike or the musical cataloging of a new vocalist, such as Sam Smith At times, the answer involves multiple categories. Consider, for example, using the labels Prime Minister, officer in the British Army, author, artist, and historian to describe Winston Churchill. Should there be difficulty in assigning something new into an existing category; a fresh category can be defined. As when Apple’s iPad release accelerated the marketing of “tablets” to differentiate them from other forms of computers. At other times, previously categorised items can be reassigned, as when Pluto shifted from the planet category into the “dwarf planet” category. Category Thinking helps us to make order out of apparent chaos, allowing us to navigate through each day. Edward de Bono, author of over 60 books on creative thinking, offers the explanation that our brains are self-patterning mechanisms. In the process of placing new discoveries into one or more categories, differences between these unique items still exist after each placement. Sebastian Coe, Lindford Christie, and Rebecca Adlington fall into the category of “past or present UK Olympians,” yet variation exists; they are not the same. Neither are cloned sheep, beginning with Dolly, as discovered by biologists in Scotland in 1996. Variation also applies to MPs, Queens, doctors,
vice presidents, project managers, and teachers, labels we use every day. Continuum Thinking recognises these differences, much as a petrol gauge in an automobile allows us to discern the difference between a full tank and a quarter of a tank. The purposeful use of Continuum Thinking allows these differences to be well managed, leading to dramatic improvements in integration efforts, whether they appear in the final assembly of an airplane or the final integration of a new software product. Given this linguistic foundation, what can be said of options to place the term “lean” into category thinking or continuum thinking? One possibility is that lean represents continuum thinking, owing the explanation to lean’s tenet of “continuous improvement.” Or, could it be “category” thinking, with the explanation that lean does not end in “er”? In the spirit of “lean represents continuum thinking,” I am aware of explanations that a lean implementation effort would include the “continuous elimination of waste,” relentlessly pursued “until all of the waste was eliminated.” What remains to be described is the appearance of an organization with zero waste. This construct, coupled with several other accounts of Toyota, led to a visioning exercise which will be the subject of next month’s column. In the spirit of Russ’s challenge to what appears to be “self-evident,” I am also reminded of his axiom, “getting rid of what you do not want does not get you what you want.” Is it time to pass through the prevailing model of Toyota to another model of their production system, one which acknowledges the deliberate use of both category and continuum thinking?
www.leanmj.com | November 2015
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CASE STUDY SPI LASERS
lean had helped the company and the journey it had taken them on. The company was growing quickly and in 2008 were in need of investment to continue their upward trajectory. In stepped Trumpf, a large German manufacturer of metal processing equipment: “When Trumpf came in they had a lean programme since 1998 and they brought in an ex-Toyota consultant to help set it up. They’d been doing it for more or less 10 years when they’d acquired us and they had rolled it out across all plants,” Don tells me. “So when they acquired us in 2008 along with that came SYNCHRO which is their lean production system and it’s essentially synchronised production. A product comes along to the right place, at the right time with the right person the right tools and the right materials and is about synchronising that so you are constantly creating a value add at the workplace.” SPI’s lean journey began in 2009 but it wasn’t smooth sailing. Despite their parent company having a lean programme that was about a decade old, it was in a completely different field and on a totally different scale.
SPI Lasers Cutting through the unnecessary to become the leanest laser manufacturer out there. Fred Tongue went to visit SPI Lasers in Southampton to see how a laser manufacturer cuts down on costs.
I
n an industrial park just outside of Southampton is SPI Lasers, a firm who have seen the light when it comes to lean and have used it to become a serious player in the fibre laser game invited me for a visit. The company began life as Southampton Photonics Inc in 1999. The firm came about off the back of a startup at The University of Southampton focused around the telecoms boom of the
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late 90’s. In 2001, when the telecoms industry crashed, the company went in to hibernation and later re-emerged in 2003 after appointing a new CEO and decided to focus on fibre lasers instead of telecoms. In January 2004 the company launched its first products. Since then the company has gone from strength to strength. I sat down and spoke with Don Riddell, chief operations officer for SPI, about the way
“So you go to a Trumpf site to see how they’ve implemented it and they’re making flatbed cutting machines that are the size of a room with a TAKT time of 2 or 3 days. We’re looking at that saying that looks really incredible but how the hell do you apply that to making a fibre laser which is something small that you can pick up.” Despite the lack of a blue print or like for like system for SPI to copy, through some trial and error they honed their lean strategies to suit their business. The company is a big user of Kanban in their production process and use a milk run system to ensure that parts are where they need to be when they are needed. The factory is also covered in whiteboards and visual aids. As Don took me round he said “I don’t think there’s a wall in here that doesn’t have one on.” Everything is represented visually, Don explained that meetings concerning the shop floor took place on the shop floor and that
CASE STUDY
Kanban replenishment in action on the shop floor at SPI.
daily meeting always happened stood up around a white board because it helps with focus. The whiteboards are covered with order updates, prioritised fault fixing and feedback from employees. As a laser manufacturer, SPI encounter quite a few issues that are unique to them and their field. “Probably the biggest challenge is that you need good stabilisation in your production in terms of yields. High yields, low rework, good predictability to get to the point where something is running in a single piece flow.” It is also a struggle to design a product to be lean when there is so much precise technology involved, Don explains that, “it sucks the R and D community in more than they want to be because there’s a lot of problems you can’t just solve in production, there’s a lot of physics involved and so when you’re sitting down with your designers and say ‘I need this to work 99 times out of 100’ and they’re talking about what photons are doing and this and that but you’re saying ‘I don’t care I want it to work 99 times out of 100’ that forces you in to a much more structured approach.” The approach that the team at SPI took was to get rid of the word yield because, as Don put it, “what production people tend to do is take the product of all those yields and say that’s our end to end yield. That doesn’t help in the context of lean.” The firm now uses the term ‘right first time’. If you launch 10 parts how many
made it to the end with no problems no disruptions. It’s that percentage that we really care about.” Lean is often seen to be the enemy of innovation, but for SPI the company needs to keep down costs but also stay at the leading edge of innovation if they want to maintain their place in the market. While speaking to Don he mentioned the fact that “you are only ever six months ahead of your rival.” The importance for the firm to constantly innovate is crucial. That is why the firm design products with their lean manufacturing processes in mind. “At the very start, at the concept stage with R and D engineers, we trained them and then we worked alongside them developing the concept so that we could maximise what we could do.” The key for SPI was to give their designers clear targets and training that helped them to achieve these goals. In designing the 4th generation of one of their products Don told me, “A lot of it’s not rocket science but we halved the number of piece parts. We actually reduced to 30% the number of unique parts, we gave them the target to get the labour down to 30% of the generation three product.” In terms of mind set the point was to always be critical of their own work. It wasn’t to be happy with something if it worked, but whether or not the stages of design, production and function were all value add, “They picked through it and
they latched on to the idea of breaking things down in to value, essential non value and true waste. They were the guys saying ‘why did we screw that in?’ But they had actually designed the generation three so they were critically analysing their own product, that was actually making sure what they put in to the generation four product was value add or really was essential non value add.” Another common issue with lean is getting everyone in the organisation to buy in. It is one thing to have grand designs for your company that save you money, make you more competitive and move the organisation forward but if you don’t communicate the changes and why they are being put in to place then you might risk a mutiny, or at least some parts of the company not pulling as hard as other parts. SPI made sure that all members of staff understood the changes that were happening and why. “The question is can you really be an excellent company if it’s only driven by a few people. That was the big question and we thought no you can’t be.” SPI has engrained lean in to the business plan from the very roots. Everything bears the mark of lean thinking, whether it is heijunka boards in the fibre production facility, a mechano-esque system for workers that allows quick and easy manipulation of the work place or training programme for every worker to help identify waste accurately. To SPI lean is “like a virus, it’s incredibly powerful.”
www.leanmj.com | November 2015
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BOOK REVIEW In this review, Joe Bell revisits a Management Classic: Stephen Covey’s ‘7 Habits of Highly Effective People’. How does it stand the test of time?
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riginally published in 1989, Covey’s 7 Habits became a bestseller in management self-help sections everywhere and gave rise to a preponderance of leadership books. Every airport now has an entire section devoted to leadership so occasionally it is worthwhile revisiting a top seller. In 7 Habits, Covey’s central message is this: we are what we repeatedly do. Therefore excellence is not an act, it is a habit…and habits can be both learned and unlearned. Covey contends that to be highly effective we can adopt certain habits that will empower us to become more emotionally intelligent and capable. In a nutshell: stop making excuses and take ownership of your actions. Boiled down, Covey’s book is one of choice and positive psychology. By taking responsibility for our actions and acting with fairness, integrity and maturity we can create a new, better and more effective version of ourselves. Covey lists 7 habits that most of us will be familiar with – even those who have never read the book – such is their impact upon management lexicon. The 7 Habits are well established: Be Proactive; Begin with the End in Mind; Put First Things First; Think Win/Win; Seek First to Understand Then to be Understood; Synergize and Sharpen the Saw.
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The Habits are clearly explained and compelling. For me, the success of the book lies in the clarity of its message and the simplicity of what the habits are encouraging the reader to achieve. Consider what is important to you, consider how you would like to be perceived, consider how you could best use your time, continue to grow…and so on. Covey’s greatest feat is in addressing the human condition and those petty emotions that affect us all. By focussing internally and working hard on the principles within our character we can move beyond resentment, jealousy and resignation. Covey captures this as the ‘private/public victory’: working on our inner-self before working on the interpersonal dimension. His interdependence paradigm looks a little dated nowadays but is still valid. Much well-known management speak emanated from 7 Habits, some of which are widely derided nowadays. Thinking ‘win-win’, ‘synergize’ and ‘be proactive’ may bring David Brent to mind…but it’s worth remembering that this was pretty new at the time. Covey’s book pretty much popularised the concept of personal choice and taking ownership of how we interact with the world around us. By becoming more aware of how our actions (habits) determine the success
that we experience, we can proactively change these through discipline and goalorientation. Personal success is possible by taking positive action. In summary, 7 Habits outlines a holistic approach to personal and professional change. Ground-breaking in its time, Covey’s book remains relevant and interesting today. Highly recommended.
WHAT I LIKED
Compelling and clearly written Habits have stood test of time Founded much modern leadership theory
WHAT I DIDN’T
Some anecdotes are clunky Can feel dated in part At times idealistic
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LEAN ONLINE NOVEMBER 2015
LEAN ONLINE
LEAN NLINE
ROUNDING UP THE MONTH’S DIGITAL COMMUNICATIONS ON LEAN
LMJ’s social media pages are a great place to go for lots of networking opportunities and information on all things lean from around the web. Find industry experts and exciting discussions on our LinkedIn page, and follow @LeanMJournal and @fredtonguejourn for news on upcoming events and ways to get involved with the LMJ.
YOUR TWEET S
LMJ editorial board member Steve Yorkstone has written a piece on LinkedIn about the future of lean and whether or not it is time to retire the term. http://bit.ly/1jgQA0J
Mark Graban writes a regular blog all about covering all sorts of lean issues, thoughts and much more that is well worth a read.
Jim Womack gives his two cents on the VW crisis and how putting the company ahead of the customer can cost the in long run.
http://bit.ly/1VIOXVX
http://bit.ly/1LLKGQD
www.leanmj.com | November 2015
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E V E N T S There is currently an expanding pool of events available for the development of the lean community. They offer both general and sector specific opportunities to renew your enthusiasm and gain new perspectives through communicating with lean contemporaries.
UPCOMING LEAN EVENTS INCLUDE:
CX IMPACT 2015
7th-9th December, New Orleans, Louisiana Customer Experience is the last remaining competitive differentiator. Customer relationships are the key to long-term business success and competitive position. C level executives are focused on enhancing the Customer Experience. According to Call Center IQ’s 2015 Report on Customer Experience, “increasing customer loyalty” is a top priority for 29% of C-level executives. Plus, according to a recent Forbes/EY study, 90% of CMOs report that building trusted customer relationships is a signficant focus of their departments’ strategic and competitive vision. At this event, learn about the latest data and analytics technologies to build credibility and long term relationships with customers. To find out more visit: www.cximpact.com
LEAN TRANSFORMATION MODEL WORKSHOPS
14th-18th December 2015, Ross on Wye, UK In January 2014, John Shook shared the Lean Transformation Model – the model that we and our colleagues in the Lean Global Network have been developing to guide transformations with our partner companies, large and small, across a wide range of industries. We have now developed a series of workshops around the five areas of the model – facilitating discussion around the obstacles required to close gaps between each organisation’s current state and the proposed target condition. The workshops will run over 5 consecutive days at our offices in Ross-on-Wye, Herefordshire and by facilitated by our Lean coach Darren Walsh. To find out more or book visit: http://bit.ly/1Opdxw3
17TH ANNUAL SIX SIGMA & PROCESS IMPROVEMENT SUMMIT 2016
18th-22nd January, 2016, Hilton Orlando Lake Buena Vista, Lake Buena Vista, FL Process Excellence Week is a cross industry showcase of the most forward thinking programs and case studies in operational excellence, strategic business transformation, BPM and continuous improvement. Like no other event, PEX Week brings together the most passionate and committed individuals and companies in Business Transformation, BPM, Lean, Six Sigma, Operational Excellence and Change Management. PEX Week 2016 provides a comprehensive round up of new trends, hot innovation, best practice and leading thinking in the process and operational excellence strategy and transformation space. If you would like to more or attend visit: www.pexweek.com
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